Compact-disc Makers Hope To Break Records

July 5, 1986|By Newsday

NEW YORK — Gene Scozzafava has sold his collection of 200 Elvis Presley and 30 Barbra Streisand long-playing record albums and is replacing them with compact audio discs.

''You don't get any of the snap, crackle, pop you get on records,'' he said recently at Tower Records in Greenwich Village. ''And you hear things you never hear on records, like on Michael Jackson's 'Thriller' you can hear him snapping his fingers.''

The explosive growth of CDs, with 1986 sales projected at 45 million units valued at $780 million, has been spurred by plunging prices for CD players.

Last year, nearly a million CD players were sold in the United States, and sales are projected at 1.8 million this year. By the end of 1987, 7 percent of U.S. households are expected to own the laser-operated devices, which now cost as little as $100.

In addition to electronics manufacturers and major record labels, some smaller companies are hoping to jump on the turntable.

Officials at industry leader Sony's factory say they have stamped out most of the bugs and now can produce 18 million discs a year. But if all the new entries realize their estimates, annual capacity would top 200 million discs by the end of 1987.

The dangers in the CD field far exceed those of record-pressing plants, which can cost as little as $1 million to $2 million, or those of tape- duplicating facilities, which cost even less.

Compact-disc plants cost from $10 million to $60 million, depending on capacity. Beyond the money, CD technology poses challenges that rival or even surpass those of producing semiconductors. In addition, another new format, called digital audio tape, is to be introduced soon.

Still, more than a dozen companies are set to pour hundreds of millions of dollars into CDs, a business they expect to become a multibillion-dollar industry within a decade. Discs are read by laser rather than needle or tape head, so they do not wear out.

Some major record labels, including the music divisions of CBS Inc. and RCA Corp., have yet to decide whether to build plants, despite their need for an assured supply.

But U.S. sales are expected nearly to double this year, to 45 million discs, and double again next year -- even though CDs cost up to twice as much as records and tapes.